Wednesday, October 10, 2012

On October 11, I am speaking at an event sponsored by
Vermont Law School's Federalist Society chapter. The topic is "The
Administrative State," with a special focus on what Federalist Papers Nos.
47 and 51 have to say about the role of administrative agencies in our system
of government.

This is a very good topic, for which I commend Vermont Law
School's students. If I had my way, not just all law students, but all college
students, would be required to read at least certain numbers of the Federalist
Papers (especially Nos. 10, 47, 48, 51, 55, 70, and 78) before receiving their
degrees!

Federalist Nos. 47 and 51 consider the role of separation of
powers in our constitutional design, and they contain some of the most
oft-quoted language from the papers. At the law school, I plan to discuss how
separation of powers principles impact the way we think about the
administrative state – or should think about it. With an emphasis on the
Federal Communications Commission, I'll consider the nondelegation doctrine,
the status of the so-called independent agencies, and the degree of judicial
deference accorded independent agencies vis-á-vis the executive branch
agencies.

For my purposes here, I am going to focus only on the
nondelegation doctrine. An appreciation of the doctrine's derivation from constitutional
separation of powers principles, and its purpose, is central to understanding
the way in which communications law, and the FCC itself, ought to be reformed.

In Federalist No. 47, defending the proposed Constitution against the
contention that it allowed too much blending of the separate departments’
powers, James Madison declared:

"The accumulation of all
powers, legislative, executive, and judiciary, in the same hands
. . . may justly be pronounced the very definition of tyranny. Were
the federal Constitution, therefore, really chargeable with this accumulation
of power, or with a mixture of powers, having a dangerous tendency to such
accumulation, no further arguments would be necessary to inspire a universal
reprobation of the system."

In support of the idea that separation of powers is
essential to preserve liberty, Madison referred to the writings of "the
celebrated Montesquieu," who Madison assured us, is "the oracle who
is always consulted on this subject."

It is true. Madison and many other Founders were well versed
in Montesquieu, the French Enlightenment philosophe.
In his most famous work, The Spirit of Laws, first published in English in 1750, Montesquieu
had written:

"When the legislative and
executive powers are united in the same person, or in the same body of
magistrates, there can be no liberty; because apprehensions may arise, lest the
same monarch or senate should enact tyrannical laws, to execute them in a
tyrannical manner.

Again, there is no liberty, if the
judiciary power be not separated from the legislative and executive. There
would be an end of every thing, were the same man, or the same body, whether of
the nobles or of the people, to exercise those three powers, that of enacting
laws, that of executing the public resolutions, and of trying the causes of
individuals."

"In order to lay a due
foundation for that separate and distinct exercise of the different powers of
government, which to a certain extent is admitted on all hands to be essential
to the preservation of liberty, it is evident that each department should have
a will of its own; and consequently should be so constituted that the members
of each should have as little agency as possible in the appointment of the
members of the others."

While both Nos. 47 and 51 acknowledge that some deviations
from strict separation of powers are necessary, and, in fact, are incorporated
into the constitutional framework, the emphasis in both is on the role separation
of powers plays in protecting liberty and promoting political accountability.

Consistent with separation of
powers, Article I of the Constitution provides "[a]ll legislative powers
herein shall be vested" in Congress. Now, if this injunction were taken
literally, we wouldn't have much of an "administrative state" about
which to be concerned. This is because most federal agencies, including the
FCC, exercise rulemaking power – that is, the power to promulgate regulations
that bind individuals and businesses in the same way that laws of Congress do.

But the injunction is not taken
literally. The Supreme Court has accommodated the agencies' exercise of
lawmaking power by adopting what is referred to as the "nondelegation
doctrine." The Court indulges in the fiction that there has not been an unconstitutional
delegation of power, as the Court put it in J.
W. Hampton in1928, so long as "Congress shall lay down by legislative
act an intelligible principle" to guide the agency in carrying out the
delegation of authority.

The rationale for requiring Congress
to provide an "intelligible principle" when delegating legislative
power to agencies is that we want to be able to hold Congress politically
accountable for the policy choices it makes, even if such policy choices are
set forth in fairly broad terms.

There are many enabling statutes that
contain delegations in which the required "intelligible principle" is
pretty difficult to discern. But the Communications Act, which delegates
authority to the FCC to regulate in "the public interest," is
certainly at the outer reaches of intelligibility. Much of the FCC's regulatory
activity takes place under the public interest delegation.

Where's the "intelligible
principle" in the public interest delegation?

Well, here’s what Justice
Frankfurter said in1940 in FCC v. Pottsville Broadcasting Co. Referring to the new "science of broadcasting,"
he declared the public interest standard "is as concrete as the
complicated factors for judgment in such a field of delegated authority
permit."

Read Frankfurter's statement again –
slowly, this time – as you try to discern the "intelligible
principle" laid down by Congress.

David Schoenbrod, a scholar at New York Law School, has
observed the public interest standard says "practically nothing at
all" about Congress's goals in the Communications Act. Constitutional
scholar Gary Lawson has called the standard "easy kill number one" in
terms of statutory provisions that should be invalidated on nondelegation doctrine
grounds.

But the fact of the matter is that the public interest
standard hasn't been killed. Indeed, in 1943 in National Broadcasting Company v. United
States, the Court rejected a contention the public interest standard is
unconstitutionally vague.

Even though the Supreme Court has allowed the public
interest standard to stand, it is unlikely Madison would be pleased. After all,
it is difficult to hold Congress politically accountable for communications
policy when so much of the FCC's activity takes place under the public interest
standard.

So, the lesson is this. When Congress tackles revision of
the Communications Act – as it should, and sooner rather than later – this time
it ought to do better by way of setting forth a more determinate
"intelligible principle," or principles, to guide the FCC. Given
today's competitive marketplace environment, in contrast to the much more
monopolistic environment that prevailed when the Communications Act was
adopted, the agency ought to be specifically directed by Congress to find the
existence of marketplace failure and demonstrable consumer harm before regulating.

If Congress does replace the indeterminate public interest
standard with more specific competition-based directives, communications law would
be reformed in a way that comports much more closely with fundamental
separation of powers principles. Political accountability would be increased.
Abuse of government power would be less likely.